Thursday, December 31, 2009

Inspiration from a yogurt

Paul Bennett is a business innovation consultant who goes to corporation boardrooms to give them creative ideas. For inspiration, Bennett recently visited Bangladesh and Professor Muhammad Yunus. Bennett not only wanted to talk to to Yunus about Grameen Bank, but also on their cooperation with Dannon Yogurt.

Yunus and Dannon create a vitamin packed yogurt at a low price that even the poor children of Bangladesh can afford. Dannon and Grameen run the company so that all profits go back into the company to maximize the benefit to the people of Bangladesh.

In his essay for the Financial Times, Bennett says there is a lot to be learned from this cooperation.

Prof Yunus talks about scale in the context of poverty: "To me, poor people are like bonsai trees. When you plant the best seed of the tallest tree in a flowerpot, you get a replica of the tallest tree, only inches tall. There is nothing wrong with the seed you planted, only the soil base that is too inadequate. Poor people are bonsai people. There is nothing wrong in their seeds. Simply, society never gave them the base to grow on."

Grameen Bank gives tiny, collateral-free loans, mainly to women,along with huge amounts of trust that they will reliably pay the loans back. Small local branches are run by the "Grameen lad-ies", who take pride in making their own and their customers' loan repayments - treating everyone well and behaving, frankly, more professionally than many bank professionals.

Then there is the Grameen-Danone collaboration, which started after Frank Riboud, chief executive of the French company, met Prof Yunus in 2005. Again, scale is an overwhelming theme: a tiny, "cute" factory (as Prof Yunus describes it), a 10th the size of a regular Danone plant, which makes a batch-produced, nutritionally complete yoghurt product, using local milk, collected jug-by-jug in rural villages - as I saw for myself. It is sold door-to-door by Dan-one's yoghurt ladies and marketed cleverly by a man in a Danone-branded lion suit teaching children the value of a nutritious diet.

The phrases "business-to-business" and "business-to-consumer" are bandied about endlessly. This was better: this was person-to-person. It is a "big idea".

I can hear you thinking: "This is all well and good, but does it make money?"

My learning from the trip is that Grameen is not just a bank, but an engine of learning, meaning and purpose. It makes money but it also ignites employees' passions and teaches them new ways of working. In its collaboration with Danone, this philosophy is reaping more benefits for both than the purely financial.